Author Robyn Meredith explains why an understanding of China and India is essential for business growth

The rise of China and India have impacted global trade in a good way, author Robyn Meredith explains in her new book The Elephant and The Dragon.

The book was written in Hong Kong providing Ms Meredith, Senior Editor, Asia with Forbes magazine, an ideal vantage point to witness the changing face of business in Asia.

She explains how the economic strides made by India and China in recent years have provided huge opportunities around the world.

"For developed countries there are many new jobs particularly in the high end, jobs that we couldn't have even imagined a few years ago," Ms Meredith says.

"In developing countries, many people have been lifted out of poverty as a result of the rise of India and China. In India and China alone in the 1990s, 200 million people were lifted above dollar a day poverty levels – this is a great achievement."

In the book, India is the elephant, plodding slowly but surely into the future, while China is the dragon, fast and furious, "growing so incredibly that it almost scares us".

The Elephant and The Dragon is aimed at Westerners who are watching the rise of India and China sometimes with trepidation, and wondering what it means for them. It explains how the global economy is changing, how India and China are claiming a much bigger piece of it, and how that is affecting labour markets and business opportunities around the world.

Giant opportunities

Ms Meredith says there is a misplaced fear in the US about China.
 
"China is a part of the global economy now. We must understand what's happening in India and China to do business in the world. China alone has proved a huge opportunity and even though we see it as a threat sometimes there are a lot of benefits that accrue to everyday Americans and Europeans. One of the biggest is that the rise of China has held down interest rates in the West because China has such a growing presence in the international finance markets."

For multinational companies particularly from the US, the rise of India and China is "a giant opportunity", Ms Meredith says.

"For most business people, an understanding of India and China today is as essential as an understanding of accounting used to be 20 years ago – that's because India and China are the two fastest growing big markets in the world," she pointed out.

"The US, EU and Japan and economies are growing very slowly and when companies want to boost their earnings to please their stockholders, they increasingly have to look to India and China to do that because that's where the economies are growing really fast. A lot of America's biggest exporters – Boeing for example – have dramatically increased their exports to China at the same time that we've been hearing a lot of worries about the increasing imports from China. People usually forget about the benefits and only worry about the down side."

Window on Asia

Being based in Hong Kong has provided "a real window on all of Asia", Ms Meredith says. Hong Kong's bustling and efficient port, where many of China's exports flow through on their way west or east, inspired a part of the book the author calls the disassembly line.

Drawing an analogy from Henry Ford who created a production line to build cars 100 years ago, Ms Meredith says the reverse is now happening. Henry Ford's assembly line has "shattered into 1,000 pieces and scattered around the globe", and Hong Kong companies have mastered the ability to source goods from various countries all around the world for assembly usually in China.

Other people have called this atomisation of the supply chain, or supply chain management - whatever you call it, Ms Meredith says, it's dramatically changing the world economy. "The way that things are made today is completely different than in the past."

She adds that in the developments of international trade, "Hong Kong is essential for putting west together with east and vice versa". 

Forbes' Robyn Meredith: Hong Kong central in the new supply chain